The Central Bank of Israel Not Ready to Launch it’s CBDC
The Central Bank of Israel has clarified that it is not yet ready to launch its CBDC, despite many looking forward to the launch of Israel’s digital shekel. In a report released on Monday, April 17th, the Bank of Israel stated that it is still analyzing its options and waiting for stablecoins to become more widely adopted before launching its digital CBDC.
Although up to 90% of different central banks are exploring launching their own CBDCs, only a few have actually implemented them. The Bank of Israel, Norway, and Sweden have collaborated with the Bank for International Settlements (BIS) to explore how CBDCs can be used for remittance at both international and local levels. There are several scenarios that could influence the launch of the digital shekel, including increased competition in the domestic payment system, technological advancements, and a decline in cash usage. Increased stablecoin usage may also impair the current payment system. If the US or more countries in the EU adopt CBDCs, Israel may be influenced to follow suit.
Although cash is still used for many consumer transactions in Israel, a shift away from central bank fiats could occur if the public changes their payment habits. According to the committee of the Bank, the move to issue CBDCs is to support competition in the digital financial payment system. The Bank of Israel also does not support private companies controlling digital payments in the country, which is one of the motivations for taking the CBDC route.
Israel is closely following the US when it comes to crypto regulation. Earlier this year, there was a proposal to legislate crypto assets as securities in the country, a move that many industry executives believe could negatively impact the industry.